Pittsburgh Will Hold on To Its Parking

Ah, Pittsburgh. What a sad story. What was once a very large hub for US Airways has become only a spoke in its route network. The airline only flies to three cities that aren't hubs - Raleigh, St. Louis, and Hartford - and that's all with regional carriers. At it's peak, the airline had over 500 daily departures from the airport, and the number today is less than 10% of that. Sad.

This, naturally, poses challenges for the airport because it has all of this extra capacity. In fact, large chunks of terminal space have been closed off, simply because no one's there to use the space.

But here's an issue - when the airport was a gem in the US Airways network it had to grow, and in 1992 a brand new terminal opened. And today that construction represents the majority of the airport's $435 million debt.

So the powers that be at the airport were thinking of ways to dump the debt quickly. Doing so would lower their costs, obviously, and the airport could pass that along to the airlines. That would hopefully result in maintained or enhanced service, since Pittsburgh's costs are very high relative to other airports.

One idea - sell off the parking operation to a third party. But the airport has decided that's not the way to go. Even the most optimistic assumptions don't have the sale being able to cover all of the debt. Plus the airport would still be on the hook for maintaining the facilities, and there would be no parking revenue to cover those costs. And as I've written here before, parking is a very big non-airline revenue source for airports.

So what to do? The airport says it has found ways to improve parking revenues by a few million per year, and it should be debt-free in eight years, which should hopefully bring its costs down for airlines.

You can read more here at the Pittsburgh Post-Gazette.

Atlanta Airport Mulls Fee Hike

Last week, I talked about fee hikes for off-airport parking companies at the Minneapolis Airport. Well now we're seeing more of the same at Atlanta - except to a greater degree.

Here's the deal - Atlanta has a shiny new international terminal that they're working on, and they need to issue some bonds to finance the rest of the project. Obviously, investors want to make sure that their money is safe. The more concerned they are, the higher the interest the airport has to pay. But, if airport management can find new sources of revenue, investing becomes a bit more attractive.

And what's that new revenue source? New fees for businesses!

Shuttle and limo services currently pay an annual fee to the airport - the new plan is to charge them by trip. Such a move can add a couple of million dollars in extra revenues, according to estimates.

And the off-airport parking companies could see a hit here, too. They pay annual fees as well - now the airport is looking for 8% of revenues.

I can see this from a few angles. From the local business side of things. Naturally companies that rely on the airport need to pay their fair share. But I am concerned about the effects of any rise in fees.

From the airport side, if they need to jack up rates to cover their costs, that's fine. And making sure its bonds are attractive is also very important for the long-term health of the airport. But this potential change seems abrupt. The airport should've been raising fees at a gradual pace that is predictable to business owners who can then rationally react to them.

And, while the airport is right to be constantly looking at revenue streams to boost its financial performance, it needs to consider travelers here. New international terminals are often built to make the travel experience more enjoyable, but the terminal is just part of that.  If these potential fee hikes force hotels to consolidate shuttles or make a parking company go out of business, that makes life harder for the normal passenger.

Anyway, we'll see how this goes, but just like in Minneapolis, I don't see this panning out well for passengers in the short-term. Naturally, an airport in good financial shape is a good long-term outcome, though.

You can read more about the proposed hikes here.

Logan Expands Economy Parking

Breaking new - the economy is kind of bad right now. So it makes sense that people are trimming the fat in their budgets. In the case of Logan Airport in Boston, that means increased demand for economy parking. In fact, the number of passengers using economy parking in June was more than double the number in June 2009.

Logan's increasing passenger numbers are probably a contributing factor here. But total passengers were only up 6.8% year-over-year, so there must be something else going on.

Personally, I think people are just trying to save money.  Those parking in economy save $6/day compared to other garages. If you're away for a week, that adds up.

Anyway, Massport, the agency responsible for managing Logan, is responding to the higher demand by increasing the number of economy spots available, the Boston Globe reports. Construction has started on a new economy garage on top of an existing economy lot - providing a net gain of 2,100 economy spots.

When the project finises next year, that means the number of economy spots available will more than double. The first part of the project will be complete in November.

Minneapolis Airport Hikes Shuttle Fees for Parking Companies

An interesting piece of news came out of Minneapolis this week, with the local airport commission voting to double the fee charged to off-airport parking companies when a shuttle bus comes to pick up passengers. The fee will rise from $2.55 to $5.10 by November 2011.

There are some interesting issues here.

First, this of course increases costs for off-airport parking companies. In fact, the companies are not too pleased about this since they believe the rate hike can quickly turn profits into losses. And plus, increased costs for businesses often mean increased prices for consumers.

So why raise the fee? The airport commission says this will help pay for improvements to the airport. Which is probably true - but this article from the Minneapolis Star-Tribune brings up a good point - the commission is also raising the costs of a competitor here. The airport controls its own parking, so if off-site parking gets more expensive, it stands to benefit by potentially gaining customers. Even if that doesn't happen, there's now more revenue coming in from the shuttle buses.

In this case, the airport seems to win no matter what. I really can't find how the traveler comes out ahead in this situation.

An Interesting New Offering from US Airways: FastPath

Well, well, well. Today on Twitter I found an interesting new product from US Airways called FastPath, that is being rolled out on the airline's flights between Boston and Philadelphia.

Personally, I see this as a direct response to Southwest. The carrier launched service on the route earlier this summer, and just recent added a three more frequencies, bringing the total number of daily flights to eight.

Southwest's presence, of course, has boosted competition and lowered fares, which is great news for travelers. The conventional legacy airline response is a price match and maybe some bonus frequent flyer miles. But instead, US Airways decided to get creative with FastPath.

Some of FastPath's benefits can already be found on US Airways Shuttle routes. For example, FastPath flights will leave from the same departure gates, which US Airways says are closer to security. Dedicated check-in areas is another perk that's found on Shuttle flights.

A nice new perk? Priority security line access - for everyone. This is a perk that previously is only open to First Class passengers and elite frequent flyers.

This one makes sense, especially because Southwest has good security checkpoints on its side. At Boston, Southwest uses Terminal E, which is primarily used for international flights, so it's pretty quiet during the morning. Plus, it basically has its own security checkpoint as a larger one is used for long-haul flights. Meanwhile, at PHL, Southwest's checkpoint is found at the still-new D/E connector, which is quite nice.

Anyway, an interesting move by US Airways to create value. Let's see how it goes, and if/how Southwest responds.

Good News for Virgin Flyers

Well, here's some good news for those who are loyal to the Virgin Airlines (Virgin America, Virgin Blue and Virgin Atlantic) - the three carriers are rolling out frequent flyer reciprocity.

What does that mean? Well, if you're loyal to one Virgin carrier, you can earn points in that airline's loyalty program. So, I'm a member of Virgin America's Elevate program. When I fly Virgin Atlantic, I can now earn Elevate points. Over the next few months, the three airlines will roll out the ability to redeem points on each other's flights.

This is something that has been talked about in stages for awhile - for example Virgin America and Blue were already planning this. But reciprocity among all three carriers is a new thing.

So what can you do today? Well, you can earn points in any program on any Virgin carrier. Yay. Also, members of Virgin Atlantic's Flying Club and Virgin Blue's Velocity and redeem on either airline.

In the fourth quarter of this year, redemption between Virgin Blue/V Australia and Virgin America will be set up, and in the second quarter of next year, redemption between Virgin America and Atlantic will be ready to go.

A nice move, I say!

A Human Fee?

Oh, Spirit. Just as you're in the midst of adding a carry-on bag fee you mention the possibility of the fee for talking to a human being at the airport. One at a time, please?

But seriously, before another media firestorm hits, I feel I should defend Spirit - sort of. It's simple - fees are their strategy. Spirit wants to unbundle as much as possible, which lowers their costs, and customers who want the extra frills send Spirit some nice ancillary revenue. If you don't like it, I would recommend flying someone else.

A fee for talking to a person at the airport shouldn't really surprise anyone. The airlines have been encouraging us travelers to engage in less human contact for years. I mean, most airlines charge for you to make a reservation over the phone, and charge you more to pay for a checked bag at the airport. Not to mention encouragement to check-in online. Plus Continental is even now testing self-boarding in Houston. So this seems like more of a natural progression than anything to me.

Nevertheless, Spirit says this won't be coming until they enhance their kiosks to handle more functions.